I never use those system variables.
what are the settings? - before and after.
any of the xxxxCTL sysvars set the percentage of fading that occurs.
In this case, XDWGFADECTL makes all objects from an XREF fade.
For example, the bottom-most two lines are actually the same color (green / #3) but the darker one is just faded because it's from an XREF. I don't use these sysvars too often, but they come in handy for some specific tasks where I want to be able to visually ignore the XREF while still needing to refer to it now and then.
The sysvar setting is 0-90. 0 will be 0% fading, or no fading at all, and 90 will be 90% fading, to the point where you barely see it.
Any time I have it set to a non-zero, and any amount of fading occurs, the ARC objects never fade. Very strange. Just a quirk that doesn't affect me much, but I thought I'd see if anyone else has this happen as well.
Maybe it's your vid card/driver.
That's what I was hoping too. I figured if no one else saw it, it must be something like that. It's a "Gamer card" anyways, a Geforce 6800, a little dated. So it's possible. There's a whole slew of display quirks and errors that this card causes.